Finance chief eyes insurance sector

Finance Secretary Carlos G. Dominguez III

The massive P8 trillion ($150 billion) “Build, Build, Build” (BBB) program of the Duterte administration provides excellent investment opportunities for the insurance industry as Finance Secretary Carlos Dominguez III called on the sector to include BBB in its portfolio.

Dominguez said the sector should invest in infrastructure and participate in the government’s agenda to super boost the economy with the ambitious infrastructure investment.

He told leaders of the insurance industry during the 68th anniversary celebration of the Philippine Life Insurance Association Inc., “I urge you to more closely review the investment opportunities opened by the infrastructure program and making a conscious effort to participate. It not only makes sound business sense to do so. It is also a patriotic thing to do.”

The Insurance Commission (IC) is now working on the circular setting the framework for these investments in infrastructure, which, “from a risk management standpoint, diversifies the insurance industry’s profit-making ventures that are mainly concentrated in accumulating real estate assets,” Dominguez said.

Aside from investing in BBB, Dominguez also challenged industry players to come up with new products that will encourage more Filipinos to avail themselves of insurance coverage.

He cited 2017 data from the IC showing that around half of the population are insured through traditional life insurance and mutual benefit associations while the rest “are left vulnerable to the uncertainties of life.”

“There should be a way for the insurance industry to design products that will broaden the base of life insurance coverage. That will be a service to our people,” Dominguez said.

He described 2017 as a “banner year” for the insurance industry, with its assets rising to an all-time high of P1.56 trillion, of which P1.26 trillion or 81 percent is held by the life insurance sector.

He said that IC Commissioner Dennis Funa informed him that the industry is set to surpass its 2017 feat through another record-breaking accomplishment this year.

“I take that to be both good news and bad. It suggests that there is too much headroom for expansion in the non-life sector, where insurance coverage will help our enterprises better manage risks,” Dominguez said.